SAO PAULO, July 17 (Reuters) - State-controlled Petróleo Brasileiro SA hired a group of five banks to handle the initial public offering of its fuel distribution business, which could sell up from 25 percent of the unit to investors, the newswire service of O Estado de S. Paulo newspaper said on Friday.
The investment-banking units of Citigroup Inc, Banco Bradesco SA, Itaú Unibanco Holding SA, Banco do Brasil SA and Grupo BTG Pactual SA were hired to handle the IPO of BR Distribuidora SA, as the unit is known, according to Agência Estado, which cited sources with knowledge of the situation.
Petrobras and the banks declined to comment.
BR Distribuidora controls Brazil's largest gasoline, ethanol and diesel station network. Petrobras, as the state oil producer is known, hired Itaú to manage the sale of fuel stations outside Brazil, sources told Reuters recently.
Another investment bank, preferably global, could be hired for the BR Distribuidora IPO, the wire added. BR Distribuidora will be listed in the Novo Mercado, a section of the São Paulo Stock Exchange with the strictest corporate governance rules, the wire said.
Petrobras is increasingly relying on cost reductions, asset sales and decreasing capital spending as a way to keep debt sustainable in the face of a corruption investigation. BR Distribuidora, which had 121 billion reais ($38 billion) in revenue last year, was recently valued at about $10 billion by UBS Securities analysts.
$1 = 3.1891 Brazilian reais Reporting by Guillermo Parra-Bernal; Additional reporting by Paula Laier and Aluísio Alves in São Paulo; Editing by Lisa Shumaker